Real Capital Analytics – Medical Office Building Market Overview


In 2009, medical office sales volume totaled $1.45 billion, a 63% decrease compared to the prior year. While the drop was steep, in the context of a 72% decline in total volume for the office sector, medical office properties proved relatively resilient. On a quarterly basis, sales fell 64% in the fourth quarter compared to the same period a year earlier. Sales of medical offices slowed dramatically in Q1’09, paving the way for favorable comparables as the year wore on.

On a per-square-foot basis, average pricing for medical offices fell just 6% over the course of the year, a small drop compared to the 26% decline for the entire office sector. Reflecting continuing interest in the niche, average cap rates rose much less steeply for medical offices than for office properties as a whole, with increases of 69 bps and 128 bps, respectively. Still, average cap rates for medical offices, at 8.1%, remained a slight 20 bps below that for the office sector as a whole.

REITs represented the largest buyer group, accounting for 28% of all acquisitions. Both local and national private buyers were active investors over the course of the year, each taking a 19% share, although the two groups also comprised 39% of all sellers. Dominating the seller composition, users accounted for 46% of all medical office dispositions.

Be Sociable, Share!
    Categories : National News

    Comments are closed.